As well as being beautifully made musical instruments that would grace any home, Steinway pianos represent a sound investment as a growing number of investors are discovering.
For the vast majority of those who buy a Steinway piano the appeal is entirely musical and aesthetic. The opportunity to own and play the instrument preferred by nine out of ten concert pianists is a reward in itself, as is filling their home with music produced by a beautiful object that has taken around an entire year to build.
But as well as being a work of art that gives immense pleasure a Steinway piano is also a very sound financial investment. For example, a 50-year-old Steinway commands, on average, a price that is more than nine times its original price tag. A Steinway Model D-274 built in 1900 sold for around $1,400 would have fetched around $83,100 in 2000. Steinway might be best known for its grand pianos but a Steinway vertical or upright piano can also command a handsome resale value as well – selling, on average, at over twice its original price.
According to Fortune magazine in 2003, “Steinway & Sons inhabits a peculiar place in American business. It lies somewhere beyond the P/L, the quarterly budgets, and the analysts’ calls. It lies in the place where skills and craftsmanship almost supersede those worldly worries.”
Although Steinway pianos have a long track record as reliable investments, they also form part of a more recent trend. Over the last few decades there has been a growing interest in alternative investments that have seen shrewd, open minded investors putting their money into asset classes such as art, wine, watches, jewellery, antiques, vintage cars and, of course, musical instruments. Since the financial crisis of 2008 left stock markets jittery and the real estate market depressed, more money has flowed into these investments, which are often known as “uncorrelated,” because they are not closely connected to the ups and downs of the stock markets.
According to a report entitled “2020 Foresight Report: Luxury Investments Since 2007”, an increasing number of High Net Worth Individuals (HNWIs) continue to express an interest in these alternative investments. Alternative investments by American HNWIs, for instance, were valued at US$118 billion in 2012, and more than half of all millionaires in China have opted for such investments.
Musical instruments account for an important part of this asset class. According to the UK’s Daily Telegraph newspaper, in April 2013, “Over the past decade, the prices of the most collectable grand pianos have doubled, thanks to an increase in demand – much of it coming from international musicians, particularly those in China.”
A 1970 Model Z upright Steinway used by John Lennon to compose the hit song Imagine was sold at auction for $2.1million/£1.67million to the singer George Michael in October 2000. This is a particularly glamorous example, of course, but in recent years Steinway pianos have regularly beaten their reserve prices at auction. For example, a Steinway from 1959, a New York Grand Model S in walnut, sold in January 2013 for £16,250/$25,594 at Christie’s in London despite a reserve of just £2,000 to £3,000/$3,3138 to $4,707, while a 1936 Steinway went at the same auction house in January 2009 for $17,713/£12,500 against an estimate of only £1,500 to £2,500/$2,300 to $3,700.
As these figures clearly demonstrate and as a growing number of savvy investors, as well as music lovers, are discovering, thanks to its rarity value, its reputation and the great craftsmanship that goes into its construction, a Steinway offers a good investment as part of a diversified portfolio.
Nothing in this article is intended to constitute investment advice